Industry Analyses

Part
01
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Part
01

Industry Overview - Apartment/House Cleaning

The general characteristics of the home / apartment cleaning industry in the US are: 75% of the contracted services are for cleaning houses and 25% for cleaning apartments, service costs cost, on average, U $20.00 a U $25.00, services are usually offered through social networks (Facebook, Instagram), customers are usually couples with annual income greater than $100 000 per year and over 45 years, and it is a profitable sector that has grown more than 3% in 2018. Some key players in the market are MaidPro, Home Cleaning Centers of America, and Merry Maids, and the main trends are use of social networks to facilitate contact with customers, sustainable cleaning market and use of prepayment.


Percentage of cleaning services IN HOMES AND apartments


How services are usually advertised to customers

  • In the U.S apartment / residential cleaning services are usually advertised through three means: applications, websites, and online platforms (the majority in 2018) or via telephone (a call center).
  • The main way to hire residential cleaning services in the U.S is through companies that manage a cleaning staff. Most of the companies in operation in the U.S are franchises.

Price ranges for CLEANING SERVICES

  • According to the most recent survey by the Bureau of Labor Statistics (2017), the average hourly rate for residential cleaning services in the U.S is $20.24.
  • According to Buckets & Bows and Thumbtack, the average cost of house cleaning is $25-50 per hour per cleaner. The total price depends on the size of the home and type of cleaning. A 3-bedroom, 2000 square foot home costs $150 to $250 to clean on average, while a one-bedroom apartment starts at $80 to $110. Deep cleaning, laundry, window cleaning, and move-out or event cleanup will add to the cost.
  • In addition to the size of the home, other factors that influence the price are the frequency with which the client requests the residential cleaning, if it will provide the cleaning products and if there are pets at home.

TYPICAL CUSTOMER OF THE house/apartment cleaning SERVICE

  • According to data from the Small Business Development Center Network (SBDCNet), the main target market for residential cleaning services in U.S. includes individuals with above-average annual family income, generally above $100,000.
  • In the U.S., the demand for house and apartment-cleaning services is most popular with people of higher than average wealth looking for a little more free time.
  • Consumers who spend their income on cleaning services are often part of a two-income household.
  • Other consumers of household cleaning services include families with elderly members living in the home.

Is the industry currently profiting or not?

  • The residential cleaning industry in the U.S experienced a financial crisis in 2008/2009, but today is very profitable.
  • Revenues from house/apartment cleaning services grew 3.2% a year to $65 billion in 2019.
  • Industry analysts predicted that growth in US residential cleaning services in 2019 will result in "an increase in the percentage of households with annual incomes over $100,000, with numbers rising from 23.1% of the US population in 2014 to 24.9% by 2019."
  • Analysts also foresee "an increasing number of families with two incomes and a demographically traditionally more willing to pay for domestic cleaning services."
  • The residential cleaning industry is very competitive. Marketing and choosing the right locations are a few crucial elements for running a successful business.
  • Large populations of wealthy families ensure consistent business and high revenue for residential and apartment cleaning services.
  • Another factor that boosts the sector's profitability is the growing number of elderly individuals in the United States. The increased average age for a US citizen has created a demand for industrial services that help the elderly in daily tasks.

3 key players in the market

  • According to First Research,"fragmented, with the 50 largest companies generating just 30 percent of revenue and no business owning an overwhelming majority of the market."
  • MaidPro and Home Cleaning Centers of America are the franchises with the highest visibility in the industry in the years 2017 and 2018.
  • These companies only higher professionals and use OSHA-approved cleaning products. Their business models are used as a basis for other companies.
  • Lack of communication and trust are some leading factors that cause consumers to switch their cleaning service. However, Maid Pro and Home Cleaning Centers of America excel in these categories.
  • The American company Merry Maids is another example of a successful residential cleaning service. It offers a full range of domestic cleaning services, including ecological cleaning, and a satisfaction guarantee, or they will clean your space again with no charge.
  • Molly Maids also meets the new safety restrictions that began in 2018 with their Design for the Environment (DfE).

3 trends IN the RESIDENTIAL cleaning industry

TREND #1: COMMUNICATING THROUGH SOCIAL MEDIA
  • Make it easy for homeowners to contact the companies that offer residence cleaning services, mainly through social networks (Facebook, Instagram, twitter and whatsapp).
  • Since 2017, all major companies have adapted to communicating with customers through social media. Most companies that do not adopt this change now face bankruptcy.
  • Examples of US residential cleaning services companies that have successfully transitioned include My Amazing Maid and Handmaid Cleaning.
  • My Amazing Maid keeps a blog, updating it with news from cleaning culture. They share these posts on their social media networks. The Maid swapped paid magazine ads for Instagram and Facebook posts and chat on their site.
  • The company Handmaid Cleaning has experienced much success using Facebook Messenger to contact customers, claiming 100% responses, as opposed to the 40% they were claiming with their old forms of communication.

TREND # 2: SUSTAINABLE RESIDENTIAL CLEANING
  • Sustainability is a very big trend in the apartment and house cleaning service industry. Companies that are not adapting to green housekeeping standards have lost a large number of their customer base to companies who highlight and focus on green and environmentally-friendly cleaning solutions.
  • In the last 5 years, consumers have placed a huge emphasis on wanting a commitment to clean and sustainable cleaning solutions, and have consistently demonstrated this with hiring services that promise these cleaning procedures.
  • In the U.S. residential cleaning industry, companies like Clean Focus Services, Filta Environmental Kitchen Solutions, Enovana Green Cleaning are offering environmentally-friendly services and have increased their profitability because they have increased their, clientele, and charge for the increased value of their services due to their commitment to sustainability.
  • The trend has had a large enough impact that customers now are calling for green-certified companies such as Leadership in Energy and Environmental Design (LEED), CIMS (Cleaning Industry Management Standard) to include the Green Building (GB) criteria.

TREND #3: PREPAYMENT TECHNOLOGIES
  • The implementation of payment technologies markets is a very strong trend in the US house / apartment cleaning industry.
  • Some companies that have not adapted and are being replaced by companies with prepayment technology.
  • The market for cleaning houses and apartments in the U.S does not have systems to ensure customer loyalty, so if the company does not fit the needs of the client, it is replaced.
  • Another factor that demonstrates this trend is the public's desire for a process that reduces the amount of time spent dealing with setting up and paying for the service.
  • Customers accustomed to an online payment or prepayment function with services like Uber will continue to expect other industries to adopt this technology.
  • Tools such as Joober have been acquired by strong industry players like Harding's Cleaning Division, The Maid Mentor, and Clean Focus Services, which have all invested their efforts in payment automation tactics and the trend is proven to increase their profitability.
Part
02
of twelve
Part
02

Industry Overview - Pet Walking

Detailed research fails to uncover a list of precompiled trends for the of the pet walking industry in the United States. A recent Forbes publication reveals that due to insufficient participation in exercise activities, one out of every three dogs and cats is overweight across the United States, leading to a significant cost for diagnosis and treatment. Pet owners can find dog walkers, sitters, and boarders through an app, with service costs ranging from as low as $20 to $50. The average cost of walking a dog in Beverly Hills, CA, as advertised by an online market place is $14.00 per hour. The most significant company in the pet walking industry based on venture financing is Rover, with about $203 million in venture financing. Wag, the operator of a mobile marketplace that offers on-demand dog-walking services, is one among top operators within the pet care industry with $8.9 million venture financing. A triangulation attempt reveals the following trends in the pet walking industry in the United States.

1. MILLENNIALS AND BABY BOOMERS CONTROL THE PET WALKING INDUSTRY

  • The majority of first-time dog owners across the United States are millennials.
  • Customers of the pet walking industry are most "likely tech-savvy millennials," participating in economic activities (those who are employed).
  • Millennials are taking over from baby boomers as the generation that has the highest number of pet owners and are also reshaping the industry with rising demands.
  • Millennials now account for 38% of pet owners while boomer makes up 35%, according to information attributed to the American Pet Products Association.
  • Millennials and baby boomers collectively account for 73% of pet owners across America and are most likely to patronize the pet walking industry.

2. RISING USE OF DIGITAL MARKETPLACES BY PET WALKERS/PET PARENTS

  • Millennials are known to account for the most significant percentage of pet owners and increasingly utilize their mobile devices to request on-demand pet walking services.
  • According to Dogtopia, one of the trends shaping the pet care industry is the increasing use of walk-arranging apps and mobile devices to request for cheap services for pets.
  • Wag, one of the top operators offering on-demand dog-walking, sitting, and boarding services within the pet care industry, focuses on the mobile marketplace.
  • Wag and Rover are among the newest and most significant players in the booming pet care industry based on venture capital funding and operate through digital marketplaces helping pet owners to find dog walkers.
  • Rover has raised more than $300 million through venture capital funding. Wag, the operator of a mobile (digital) marketplace and on-demand dog-walking services, is one of the top industry players with $8.9 million in venture funding.

3. SIGNIFICANT INDUSTRY CHALLENGE: LOSS OF PETS IN THE HANDS OF PET WALKERS

  • Several pet parents have lost their pets while in the hands of pet walkers. Recently, a pet owner by the name Nicole DiCarlo, lost a 4-year old pet while on a walk facilitated by the pet care startup known as Wag.
  • The cost of finding a pet that goes missing during a walk can be a significant challenge to dog walking companies. Wag, a pet walking company, recently paid for the printing of flyers and opted to cover the $5,000 reward to the finder of a pet that went missing during a walk. Wag also incurred additional costs by hiring a professional dog tracker.
  • According to a recent Vox web publication, Nicole DiCarlo is not the only person to lost a pet while in the hands of pet care companies, as several other cases exist.

4. Proliferation of on-demand dog-walking SERVICE PROVIDERS

  • According to Vox, new trends in the dog walking sector include emerging "on-demand vet services."
  • According to Schneider, the CEO of Wag, reveals the most significant innovation of the company to be "the on-demand services it brings to pet care."
  • Rover, another dog walking company, recently added "on-demand dog walking to its product suite," in reaction to Wag's recent offerings.
  • On-demand dog walking services of Rover and Wag cost about $20 for a 30-minute walk duration or $30 for a 60-minute walk.
  • Wag, the operator of a mobile marketplace and on-demand dog-walking services is one of the top operators within the pet care industry with $8.9 million in venture funding.
  • Rover is planning to expand its on-demand pet services to cover pet grooming.

5. Pet WALKING: RISING CASES OF INJURIES/BONE FRACTURES AMONG THE ELDERLY

  • Several cases of bone fractures have been reported in seniors who try to walk their dogs.
  • The 2019 University of Pennsylvania School of Medicine report reveals that fractures related to pet walks have more than doubled in 2017 when compared to 2014 statistics among patients aged 65 and older.
  • Increased pet ownership is one of the factors responsible for the rising cases of injury among older adults when walking pets.
  • Bone fracture injuries linked to pet walking (specifically dog walking) significantly increased from 1,671 cases as of 2004 to 4,396 in 2017, accounting for a 163% increase.

METHODOLOGY

Our research team scoured through industry reports, expert interviews, recent news articles and service provider websites in the pet care industry such as Rover web, Wag web, among other resources for precompiled trends related to the pet walking industry failed to uncover any helpful insights. Further research through the dog care industry publications such as Dogtopia, among other resources revealed several insights reported to be trendy across the pet care industry related to pet walking across the United States. Vital statistics were researched to back up each trend. We verified that uncovered trends are reported across a plethora of sources.

Detailed research through academic articles, educational publications, among other resources such as a University of Pennsylvania School of Medicine publication failed to uncover helpful insights into precompiled trends related to the pet walking industry. Insights obtained by researching through the University of Pennsylvania School of Medicine science daily publication for challenges experienced in the pet walking industry revealed that dog-walking-related injuries/bone fractures among people aged 65 and up are on the rise (has more than doubled). We assumed this insight to be another trend.

Further research through professional association websites such as the International Organization Of Professional Dog Walkers (IAPO) failed to uncover trends related to the pet walking industry in the United States. Insights obtained from IAPO website revealed that the IAPO certification assures customers that holders are professional dog walkers. Research for the view of experts in the dog walking industry from the review web page of the International Organization Of Professional Dog Walkers (IAPO) also failed to uncover trends related to the pet walking sector of the United States. Review comments and other articles on the web page revealed that company and career guides published by IAPO are featured in media publications such as ABC, Oprah’s newsletter, CNN website, and the Wall Street Journal online.

For a triangulation attempt, insights obtained from an Adage web publication revealed that millennials and baby boomers collectively account for 73% of pet owners across America (38% and 35% respectively), and are most the most likely age groups to patronize the pet walking industry. We assumed this insight to be one trend.

Insights obtained by researching through Vox web revealed an increasing use of digital marketplaces by pet walkers/pet parents. Rover has over $300 million in venture capital funding and is one of the newest and most significant players in the booming pet care industry across America and operates through digital marketplaces helping pet owners find dog walkers. Wag, another operator of a mobile (digital) marketplace and on-demand dog-walking services is one of the top industry players with $8.9 million in venture funding. We concluded that the increasing use of digital marketplaces is another trend in the industry. Due to the increasing cases of implementation of on-demand pet walking services by Rover and Wag (top players in the industry based on venture capital financing), we considered the proliferation of on-demand pet walking services to be another trend.

Another insight obtained from Vox web revealed some cases of pets lost during dog walk or in the custody of caretakers and the cost implication to pet walking companies. We assumed this cost of locating missing pets is significant and one of the major challenges pet walkers face.
Part
03
of twelve
Part
03

Market Size - Fitness Training Industry

The United States fitness industry is estimated to be worth $39.7 billion in 2019. Factors that affect the growth of the industry include per capita disposable income, low revenue volatility, and rising life cycle stage.

Overview

  • Between 2014 and 2019, the United States gym, health and fitness clubs industry grew at a rate of 3.5% per year on average.
  • In 2019, the industry is expected to grow by 0.5%.
  • One of the primary drivers of the growth in the fitness industry is rising per capita disposable income. In the United States, the per capita disposable income is expected to rise in 2019.
  • Other factors affecting the industry include "growing life cycle stage and low revenue volatility."
  • Fitness International LLC holds the largest market share in the United States gym, health and fitness clubs industry.

Market Size

  • The United States fitness apps and wearables market segment is worth $3.7 billion.
  • According to IBISWorld, the United States gym, health and fitness clubs industry is valued at $36 billion. This industry valuation is inclusive of personal trainers, membership fees, guest admissions, meals and beverages, and merchandise sales.
  • The personal trainers segment is valued at $9 billion in 2019.
  • Therefore, the total market size of the fitness industry in the United States is $39.7 billion ($3.7 billion + $36 billion).

Research Strategy

We commenced our research into the United States fitness training industry by searching for reports from credible research firms such as IBISWorld. We quickly realized that while there were market reports on the industry from various platforms, the reports focused on different segments of the fitness industry. Leveraging these sources on the different segments of the fitness industry, we have combined the different segments of the industry to provide the overall size of the industry. We leveraged reports from Statista and IBISWorld.

Kindly note that the IBISWorld website defaults and redirects to its homepage from our platform. We have thus, provided screenshots of the pages we used in the attached document. We have provided the links to the pages as well, which links directly to the sources when clicked from the attached document. Also, we added a screenshot of the Statista source to the attached document, peradventure it also redirects to another page.
Part
04
of twelve
Part
04

Market Size - Apartment/House Cleaning Services Industry

The market size of the United States residential cleaning services was approximately $16 billion in 2017 and $17 billion in 2018.

Market size of the apartment/house cleaning industry in the United States

  • A report revealed that the house cleaning services industry or residential cleaning services are in high demand among people with wealth above average.
  • In 2017, the market size of the United States residential cleaning services was approximately $16 billion.
  • In 2018, the market size of the United States residential cleaning services was approximately $17 billion.
  • In 2018, the residential cleaning service franchise market size was $924.7 million.
  • In 2019, the estimated residential cleaning service franchise market size is $943.1 million.
  • In 2019, the United States market growth rate for residential cleaning service franchises is 2%, while the growth rate from 2014 to 2019 is 2.8%.
Part
05
of twelve
Part
05

Market Size - Pet Walking Industry

The 2019 pet walking market size is worth approximately $956.7 million. This excludes pet sitting and is based on the 2017 market size of $900 million and a projected CAGR of 3.1%. A deeper look at our findings is below.

Pet walking market size

  • The U.S. Dog Walking and Sitting: Sector Analysis for Q3 2017 states the dog walking market was worth approximately $900 million according to IBISWorld and that this amount "does not include dog sitting."
  • The 2017 IBISWorld report on the dog walking market is no longer available, as it has been updated to the 2018 dog walking report, which puts the market size at $1 billion; however, it is unclear if this includes both dog walking and dog sitting or just dog walking.
  • Using the 2017 IBISWorld market size of $900 million and the projected growth rate of 3.1% for the dog walking segment only, the calculated 2018 market size would be about $927.9 million.
  • Using the 2017 IBISWorld market size of $900 million and the projected growth rate of 3.1% for the dog walking segment only, the calculated 2019 market size would be about $956.7 million.

Other helpful findings

  • The 2019 projected U.S. market size for the entire pet industry, which consists of food, supplies/OTC medicine, vet care, live animal purchases, and other services, is estimated to be worth $75.38 billion.
  • Using the calculated 2019 market size for dog walking only, this would mean that dog walking makes up 1% of the U.S. pet industry.
  • The 2019 projected U.S. market size for "other services" of the pet industry, which include "grooming, boarding, training, pet sitting, pet exercise, pet walking, [and] miscellaneous," is an estimated $6.31 billion.
  • Using the calculated 2019 market size for dog walking only, this would mean that dog walking makes up 15% of the "other services" segment of the pet industry.

Research Strategy

To find the total market size of the pet walking industry in the United States, we began by searching for official research reports from sources such as IBISWorld, Grandview Research, and Mintel, among others. We quickly found a 2018 IBISWorld report that set the dog walking market at $1 billion. However, it is unclear whether this included pet sitting or was just for the dog walking segment only. We continued our search through other market research sources, but could only find the global and U.S. market sizes for the entire pet industry, the global market size for the pet care industry, and the U.S. market size for other pet services, which included "grooming, boarding, training, pet sitting, pet exercise, pet walking, [and] miscellaneous."

Since our research revealed that the pet walking and pet sitting segment is growing in popularity in the U.S., we then turned to searching for consultancy and market analysis work on the pet walking industry. Our assumption was that given the low barriers to entry for this type of business, there would be market analyses conducted on the landscape in preparation for launching a similar business. We discovered that such an analysis was conducted in Q3 2017 by Radicle, a consultation company that helps "startups get in front of and engage with potential corporate partners [and] better understand their own market." This full analysis of the dog walking and pet sitting industry provided us with the 2017 IBISWorld report on the dog walking industry, which included a market size for dog walking only and clearly stated that the 2017 IBISWorld amount "does not include dog sitting."

We attempted to find the IBISWorld dog walking market report from 2017, but unfortunately, this site refreshes its reports whenever a new one is completed, and due to the booming pet services market, IBISWorld updated its analysis of the market in 2018, thereby supplanting the 2017 report. As indicated above, the 2018 report was ambiguous as to whether the $1 billion estimate for dog walking included pet sitting or not. Therefore, we elected to calculate the 2018 and 2019 dog walking market sizes based off the 2017 IBISWorld market size and the projected CAGR of 3.1%. The calculations are as follows:
  • The 2017 dog walking market size was estimated at $900 million and was projected to grow at a CAGR of 3.1%.
  • The 2018 market size would be about $927.9 million ($900,000,000 x 1.031).
  • The 2019 market size would be about $956.7 million ($927,900,000 x 1.031).
Once we had determined the market size of dog walking only, we provided some statistics that indicate the subsegment's market position in relation to the total U.S. pet industry and the "other services" segment. These calculations are as follows:
  • Total U.S. pet industry projected 2019 market size: $75.38 billion.
  • U.S. dog walking subsegment market share: 1% ($956,700,000 / $75,380,000,000).
  • The 2019 projected U.S. market size for the"other services" segment of the pet industry: $6.31 billion.
  • U.S. dog walking subsegment market share of "other services" segment: 15% ($956,700,000 / $6,310,000,000).
Note that we assumed that the dog walking market is the same as the pet walking market. This assumption is based on the fact that all market research reports referred to this subsegment interchangeably, likely because dogs are the most walked pet and other pets that may use walking services represent a negligent portion of the overall total.
Part
06
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Part
06

Industry Overview - Pet Walking (2)

The US pet walking industry employs both traditional and technological methods to advertise its services. Fees for services rendered in this industry are dependent on walk duration and any add-ons. Moreover, the industry is currently profitable and is projected to stay profitable with a steady growth.

Advertisements

  • The most common forms of advertising used by pet walking services are fliers, referrals, and Craigslist listings.
  • Large pet walking companies also advertise their services on national TV, newspaper, and via social media ad campaigns.
  • Individual pet walkers maintain a good online presence to interact with customers. The use of videos and photos proved to be efficient in "humanizing" their pet services.

Pricing

  • The cost of a single pet walk varies with time.
  • A 15 to 20-minute walk costs $15 to $17.
  • The charge for a 30 to 40-minute walk is between $18 and $22.
  • The cost of a 40-minute to an hour-long walk is $22 to $27.
  • Pet walkers also charge extra price for add-on services, such as very early morning walks and extra pets.

Profitability

  • According to a 2018 report by IBISWorld, the pet walking industry is growing at a steady rate.
  • The total industry revenue reached $1 billion in 2018, owing to an increased number of families owning pets.
  • In the coming years, pet ownership is projected to increase, making the industry profitable.
Part
07
of twelve
Part
07

Industry Overview - Pet Walking (3)

Two of the key players in the pet walking market are Rover and Wag!. The estimated percentage of pet walking services offered at home is 100%, although this number could be more of a variable by factoring in boarding services that offer walking and freelancers who offer their own services.

Rover


WAG!


% walking at home vs somewhere else


Research Strategy:

In order to determine the key players in the pet walking industry, the research team began by looking through market research studies, pet care websites, and technology/application comparison reviews. In doing so, we were able to locate five of the most commonly used apps and sites for owners to locate a walker for their pets: Rover.com, Wag!, Barkly, PetBacker, and Care.com. All five of these companies' dog walking services are based on connecting owners to local walkers who will come to the owner's home in order to take their pet out for their exercise. Based on this and the marketing language used by these websites (i.e the owners are too busy to take the time out of their day to walk their dogs), it can be assumed that the percentage of pet walking services offered at home is close to 100%.
Part
08
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Part
08

Fitness Training Services - In Home Vs. Facility

After conducting an extensive search through credible sources, we were not able to provide the percentage of fitness services that are performed in the home and in facilities. However, the research team pulled together all the relevant findings and fitness-related statistics. We have presented them below, together with the details of the team's research strategies to find the required information.

Helpful Findings

  • There are 60,870,000 fitness club members in the United States.
  • There are 38,477 health clubs in the US.
  • The total number of US fitness trainers was 299,200 in 2016 and is expected to increase to 329,200 by 2026.
  • 59% of fitness trainers work in fitness and recreational sports centers while 11% work in civic and social organizations.
  • 11% of fitness trainers are self-employed while 5% work in educational service and 4% are government-employed.
  • According to a survey by insights platform Alpha, 7% of those surveyed are currently subscribed to an in-home fitness class.
  • According to the same survey, 27% of those who work out at least once a month has a gym membership.
  • The same survey found that 54% of people are interested in buying an at-home fitness system.
  • According to an article in Entrepreneur, there is a growing movement in fitness and training to replace the gym and work out at home.
  • According to Ian McCaig, Co-Founder of fitness startup Fit, interactive home fitness is gaining mass market adoption and marginalizing the gym industry.
  • Livestreaming workouts, studio-quality workout equipment, and virtual personal trainers are three things that drive the increase in people working out at home.
  • Brands such as Mirror and Tonal are leading this trend, with professional-quality feedback systems and real-time, online instructions.
  • Wearables sales are also rising and as a result, tracking home fitness progress is becoming easier.
  • The traditional gym will have to provide more services to keep its customer share away from these new online solutions.

Research Strategy:

In order to identify the percentage of fitness services that are performed at home and in facilities, we started the search by looking through fitness magazines and other industry-specific sites, news publications, and market analysis sites. What we hoped to find this way were pre-compiled data on the percentage of fitness services by the environment they are performed in. Sites we searched include National Fitness Trade Journal, Club Solutions Magazine, news sites such as Forbes, and market analysis sites such as Statista and IBIS World. We were not able to determine any pre-compiled data to answer the query as most of them focused on general fitness industry statistics such as the total number of facilities, or the total number of gym members. While some reports discussed more people are working out at home because of innovations in exercise equipment or wearables industry, no reports provided data on the percentage of the services provided in-home and in facilities. The closest data we were able to get was a report by IBIS World which segmented personal trainers by the environment they work in, unfortunately, the data was hidden behind a paywall.

We have then decided to take a triangulation approach at this query. We looked for market sizes of (1) fitness services in the US, (2) fitness services in the US that are performed in facilities, and (3) US in-home fitness services. What we hoped to accomplish was to find the three market sizes, which we could compare to estimate what percentage of the fitness services industry in-home and in-facilities fitness services take up. This attempt has failed as we have found no market sizes to be publicly available. All we found was insights into why this industry is growing.

Next, we have decided to search governmental websites and databases, searching for segmentation of employed fitness trainers by work environment. The idea was to find information on the percentage of fitness trainers that work in clients' homes and in facilities. This information would then be used as a proxy for percent of fitness services that are performed at home and in facilities, as fitness trainers are the ones who provide the fitness services. After searching governmental sites including the Internal Revenue Service (IRS) and the US Bureau of Labor Statistics (BLS), we have determined that no publications segment the fitness instructors by workplace. The closest we get was a 2016 report by BLS which segmented fitness trainers by employers. This source has shown to not be useful as there is no way to clearly determine if 'Self-employed' would mean the trainer works exclusively at clients' homes. The official definition found on Small Business website stated this could mean the trainer can work both at clients' homes and in his own fitness studio.

Following this, we have decided to locate databases that are used to find US-based fitness instructors and look into the instructors available to see how often they provide in-home services to clients. What we hoped to accomplish was to find information on their workplace in their profiles and examine several of them to provide an estimate of how often a fitness trainer provides services in home environment vs in facilities and use this as a proxy for percent of services provided at home and in facilities. After finding and looking into several fitness trainer websites such as IDEA Fit and ACE Fitness, we found that these databases do not clearly provide information on trainers' work environments in their profiles, which is why we were not able to proceed with this strategy.

After the last strategy failed, we have decided to conduct a search for any interviews, reports or public statement fitness trainers have made that possibly give insight into how their industry is comprised in terms of work environment, how often they provide services in clients' or their own homes or how often they provide services in facilities. We hoped to gather consistent statements from more fitness trainers which we could then use to make an assumption, however, this strategy failed as we did not found interviews containing any statements relevant to the search.

As a last resort, we have conducted a search for US surveys that examine fitness class participants on where they receive the fitness services. This was an attempt to locate insights that could be used to answer the query if the survey is credible enough. While most of the surveys focused on things like general interest regarding home gyms among people, we were able to locate one survey which partially addressed some relevant information. While the survey was mentioned by several sources, it was not enough to answer the query but insights were included in the summary above.
Part
09
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Part
09

Fitness Training Services - Consumer Profile

Gen X go more to health clubs, but Millennials exercise more. Men exercise more than women, single people exercise more than married ones, while higher income and highly educated people tend to do more fitness activities.

Typical consumers — fitness training services (US)

overall:

2017:

  • In 2017, 70.2 million Americans visited a health club in the US.
  • Compared to 2008, this number represents a 31.5% growth, with 53.4 million health club visitors.
  • 60.9 million American were health club members in the US, using the club at least 104 times a year.
  • This number represents a 33.6% growth compared to 2008.

2018

Demographics:

fitness training services:

AGE

  • Gen X is the main target of health club services in US, as they hold 33% (or 19 million people) of the total number of memberships.
  • Their favorite club activities are: elliptical motion, free weights and the resistance machines (source 6).
  • Gen Z and Millennials represent only 35% of health club members.

GENDER:

  • Men exercise more than women.
  • "Males tend to be equipment-oriented, engaging more in using free weights (dumbbells, hand weights and barbells), weight/resistance machines, rowers and stationary cycles".
  • "Women prefer to participate in group exercise programs, such as Pilates, dance, step, and other choreographed exercise to music, yoga and barre."

INCOME

  • Wealthier people that make more than $75,000/year exercise more during the weekends.
  • These people tend to do 150 minutes of moderate exercise or 75 minutes of a hard workout.
  • People that gain <$20,000 annually usually do light activities during the week days.

Educational level:

  • Cause and effect: "People who earn higher incomes due to higher education have access to more resources related to healthy living".
  • Americans with higher education also buy healthier food.
  • In a survey, 85% of college graduates said to have exercised in the 30 days prior to the research.
  • With high school graduates, the number falls to 68%.

Goals: why people should purchase fitness training services

  • Lightspeed quoted 4 reasons that explain the boost of the fitness industry: the rise of lifestyle-related illness, social media’s influence, increasingly health-conscious consumers, and a shift in attitude towards healthcare.
  • Forbes quoted 6 reasons for it: health insurance costs, new demand for healthy foods, wearables, streaming exercises classes, budget-friendly gyms, and outdoor obstacle races.
  • Marital status:

    • Men exercise more than women in every marital situation.
    • Single men exercises more than married, divorced or widowed men.
    • Married men are the ones who exercise less in the male category.
    • Single women exercise more than married, divorced or widowed women.
    • Currently, married women are the ones who exercise less in the female category.

    Home vs Facility — Typical consumer

  • Americans say they can't exercise because they don't have time (42%), they aren't motivated (35%), they don't like exercising (25%), work gets in the way (23%), or they feel too old (23%).
  • Apps like Freeletics can eliminate all the excuses because they offer exercising programs.
  • Exercising apps provide people the exact things they need in order to exercise more.
  • If they exercise more, Americans would feel more energetic (68%), more motivated (64%), happier (59%), and more focused (59%).
  • General fitness activities:

    AGE:

  • Among Millennials (born between 1980 and 1999), 66.8% participated in fitness activities in 2018.
  • Among Generation X (born between 1965 to 1979), this number was 64.4%.
  • 58.9% of baby boomers (born between 1945 and 1964) participated in fitness activities in 2018 (source 5).
  • Among Gen Z (2000+), the number is the lowest, at 52.0%. (source 5).


    Part
    10
    of twelve
    Part
    10

    Fitness Training Industry - Key Players

    The top three key players based on reported annual revenue, in the Fitness Training Industry have been identified as LA Fitness ($1.8B), Life Time Fitness ($1.5B), and 24 Hours Fitness ($1.4B).

    LA Fitness

    REVENUE
    • LA Fitness International generates an estimated $1.8B in revenue annually.
    WHAT SETS THEM APART
    • LA Fitness provides its members with ways to improve their physical, and emotional well-being.
    • LA Fitness offers a mobile app to their members that allows them to check in, manage and schedule appointments with personal trainers, get details on classes, and much more.
    • In addition, LA Fitness also hosts competitive activities where members can challenge friends, join leagues, or participate in tournaments.


    Life Time fitness

    REVENUE
    • Life Time Fitness generates $1.5B in revenue annually.
    WHAT SETS THEM APART
    • Not only does Life Time Fitness strive to help members achieve their athletic and fitness goals, but they also offer members assistance with meeting their "total health objectives".
    • Life Time Fitness operates approximately one hundred fitness centers in the United States, all of which stay open 24 hours every day of the week.
    • In addition to Life Time Fitness gyms, the same services are offered through multiple other facilities such as health clubs, family recreation centers, sports clubs, and spas.


    24 HOur Fitness

    REVENUE
    • 24 Hour Fitness generates $1.4B in revenue annually.
    WHAT SETS THEM APART
    • 24 Hour Fitness provides training services, as well as classes to their individual members.
    • Classes offered are categorized into what they consider to be four key categories: "burn, strength, intensity, and bliss".
    • Assistance from instructors is available for groups of people in their GX24 class.
    • Additionally, 24 Hour Fitness also has a rewards program called Fit:Perks rewards for their active members to earn discounts, awards, and passes that allow them to bring their non-members friends with them to work out for free.

    Research Strategy:

    To identify the top key players in the Fitness Training Industry, we began our research by seeking out precompiled lists most commonly found on databases hosted by market research sites such as ResearchandMarketing and IBISWorld. While the information found using these databases was valuable, it only focused on the industry globally. This did, however, reveal that the United States is the dominant leader of the Health and Fitness Clubs Industry. In addition to this information, LA Fitness was found to be the lead competitor in this industry globally as well.

    We next researched for the key leaders in the Fitness Training Industry in the United States specifically by utilizing sites that contained statistical information such as Statista. This provided valuable insight into the major leading companies of this industry in the U.S. The data provided with these insights was, unfortunately, found to be from the year 2017. While this is technically still relevant data for today, we felt that more current data could be obtained.

    Finally, we decided to carry out a deep dive into each of the major leading companies identified in previous research. This revealed the annual revenue currently being generated by these companies. With this data, we concluded that, based on revenue, LA Fitness, Life Time Fitness, and 24 Hour Fitness are the leading key players in the Fitness Club Training Industry.
    Part
    11
    of twelve
    Part
    11

    Fitness Training Services - Trends

    Four current trends in the fitness training industry are (1) high-intensity interval training, (2) streaming fitness classes, (3) older adult fitness training programs/classes, and (4) group fitness training.

    FINDINGS

    1. HIGH-INTENSITY INTERVAL TRAINING

    • High-intensity interval training is a current trend in the U.S. fitness training industry.
    • High-intensity interval training consists of short periods of intense exercise, a short rest period, and a repetition of that pattern.
    • An example of high-intensity interval training is sprinting for 20 seconds, then jogging or walking for the next minute, followed by another 20-second sprint, and so forth.
    • High-intensity interval training is a current trend in the fitness training industry because (1) it was the top fitness trend during 2018 and (2) both the Amercian Fitness Professionals Association and Precor (a fitness equipment company) list it as a 2019 trend as well, thus showing its continued growth.
    • Factors contributing to the continued popularity of this trend are people's busy schedules that don't leave much time for working out and the awareness of research that demonstrate its resulting health benefits.
    • This trend is especially popular among millennials who participate in such training at boutique studios, in particular.

    2. streaming fitness classes

    • Streaming fitness classes is a current trend in the U.S. fitness training industry.
    • Streaming fitness classes are those that people can do at home via the internet, by following along with the instructor as they would otherwise have done in-person at a gym.
    • Physique 57 and Circuit of Change are two examples of prominent streaming fitness classes.
    • The continued growth of streaming fitness classes has been such that it was recently described as finally becoming mainstream.
    • Factors contributing to the growth of this trend are the busy schedules that many people juggle and the continued utilization of technology in society.
    • Interestingly, this trend has not displaced gym memberships, as many people who participate in streamable fitness classes also have a gym membership.

    3. older adult fitness training programs/classes

    • Fitness training programs/classes specifically designed for older individuals (Baby Boomers and seniors) is a current trend in the U.S. fitness training industry. Such programs/classes are also referred to as "active aging programs."
    • Some main exercise components of these programs/classes that cater to this age group include workouts that have lower intensity levels, such as Pilates, bodyweight training, and walking, plus exercises designed to increase flexibility and strengthen joints/muscles, such as cycling.
    • These programs/classes also can be social in nature, as it's important for them to be fun and welcoming for this age group to participate in, instead of exercise seeming intimidating due to their age.
    • Factors contributing to the growth of this trend are the increasing participation in fitness activities among older individuals and the fact that they're remaining active and healthy for more years compared to in the past.

    4. Group fitness Training

    • Group fitness training classes is a current trend in the U.S. fitness training industry.
    • Group fitness training classes are those that over five individuals participate in and are taught by instructors. The individuals participating in the classes often have different levels of fitness ability and the instructor's role is to not only teach fitness, but also to motivate them and help them attain their fitness goals.
    • Key factors driving the growth of this trend are that people find the group exercise setting motivating as they work to achieve their differing fitness goals and people enjoy the communal environment of such fitness classes.
    • Some examples of popular group fitness classes are cycling, Zumba, and Orange Theory Fitness.

    YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY:

    We determined the trends above to be current trends in the fitness training industry by ensuring that each trend is expressly described as a current trend by two reputable industry/media sources. The reputable sources we consulted were articles published by the American Fitness Professionals Association, Forbes, and Precor (a U.S. fitness equipment company). We ensured that the above trends pertain to the U.S. by finding information that specifically referenced the U.S. or by using U.S.-based sources. Lastly, we ensured that the above are current trends by finding trends that have both been used and such use is on the rise, which we ascertained from the information included in the articles.
    Part
    12
    of twelve
    Part
    12

    Fitness Training Services - Price Ranges and Profitability

    According to Statistic Brain Research Institute, the average monthly price of a gym membership is $58 per month in 2018 whereas for health clubs ranges between $40 -$100 per month. The Profit Margin has been provided as the metric for profitability for Fitness Training Industry which is about 25%. From 2014 until 2019, the Gym, Health & Fitness Clubs sector has grown by 2.8% in the US.

    Findings:

    Fitness training industry

    • The fitness training industry comprises gyms, health & fitness clubs market refers to clubs that provide exercise facilities such as weight and exercise machines, fitness classes, personal training and other services such as health and beauty facilities, drinks, foods, equipment and clothing that are designed for users to improve and maintain their physical health.

    Average Price

    • In the U.S., there are now 34,000 gyms, fitness centers, and health clubs in 2017 which is 6.4% more than four years ago in 2013.
    • The average price of a membership has risen considerably over the past several years. In fact, average dues have risen 17% from 2015 to 2017.
    • In 2014, Average price for Gym and health clubs ranges between $50 to $200 per month depending on the type of fitness facilities.
    • According to the Statistic Brain Research Institute, the average cost of a gym membership was $58 per month in 2018.
    • In 2018, the average price for health clubs ranged between $40 -$100 per month depending on the age, location and whether customers are willing to sign an extended contract.
    This shows that Average Price for Gym and health clubs has decreased from 2014 to 2018. This is because of intensity in competition as more players are entering the fitness training industry market.

    CAGR

    • Over the past five years (i.e. 2014-2018), the Gym, Health & Fitness Clubs industry has grown by 2.8% in the US.
    • The market for the fitness training industry (including Gym, Health & Fitness Clubs) is expected to accelerate in the future with an anticipated CAGR of 3% from 2019 to 2023.
    • Thus, in 2018 the revenue for fitness training industry (including Gym, Health & Fitness Clubs) was $21.6 billion and by 2023, the industry will be expected to generate the revenue of $25.1 billion.
    This shows that fitness training industry will continue to grown in next 5 years time period. The fitness training industry will increase at a CAGR of 3% from 2019 to 2023. This will happen because of the overall improved economic situation in the US.

      Profitability


      Thus, the revenue for the fitness training industry has been increasing from 2016 till 2018 from $30 billion to $36 billion. The profit margin has been provided as a metric to calculate the profitability which is at 25%

    Clients

    • In 2017, more than 54 million Americans paid gym memberships.
    • The number of Gym, Health & Fitness Clubs has grown by 2.4% from 2014 to 2019. In 2019, there were 111,055 gym, health & fitness clubs.
    • In 2016, there were around 36,000 health clubs having 57 million clients. The total revenue generated was $27 billion.
    • As per a Bloomberg report, more than 1 million people are signing up every year. Thus, the overall number of American gym memberships was at around 55 million in the year 2017.
    • In 2018, the total number of clients in health clubs and gyms had increased to 6.1 billion, compared to 4.3 billion in 2008.
    Thus, the number of gym memberships is consistently growing. This is because, the demand for gyms and health clubs are rising as people are evidently willing to spend more due to fitness concerns.

    Research Strategy:

    Methodology:

    We started off our research by finding the information relating to the Fitness & Training Industry in articles and reports such as IBIS World, Blue Water Credit, Market Watch, Market Line, and Health Line. The objective was to check the information on the average price charged within the industry. After carefully studying all the sources, we were able to establish that the Fitness Training Industry comprises Gym and Health & Fitness Clubs. As such, we broadened our search by looking into each category one by one.

    We then broadened our search and looked for some statistical information in sources such as Statista, Cheatsheet, Fitness and Toptal. We also looked and checked the statistics relating to the Fitness Training Industry (Gym and Health & Fitness Clubs) from IHRSA Data (The International Health, Racquet & Sportsclub Association). The sources provided the Information on Average Cost Range for Gym and Health & Fitness Clubs along with the Historical and Future CAGR for the period 2014-2019 and 2019 -2023.

    Next, we shifted our approach and looked for the profitability data which we found from the Fitness and Gym Statistics. The source stated the industry average profit margin for gyms. The profit margin has been provided as the metric for profitability. Thus, we used this figure as a measure to check the profitability. We then looked for all the leading players in the sector and checked their profitability. Some of these players included Planet Fitness, Snap Fitness, 24-hour Fitness, Anytime Fitness, LA Fitness, Gold’s Gym, World Gym, Crunch Fitness, Equinox Fitness Clubs, YMCA, and Lifetime Fitness.

    Since, these players cover gym, fitness and health clubs which are the integral part of the Fitness Training industry. As such, our assumption is that a similar percentage profit prevails for all categories and the average profit margin for gyms and health clubs.

    During the search, we have included sources older than two years since to get information on the industry comparison over 5 years, we had to use older sources.

    Sources
    Sources

    From Part 08
    Quotes
    • "The US is the world’s largest health and wellness market, with 38,477 clubs, and an annual growth rate of 3.6%."
    Quotes
    • "By 2015, over 55 million people were members of one of the 36 thousand health clubs in the United States."
    • "In 2017, U.S. fitness centers had a total membership of 60.87 million."
    Quotes
    • "The number of participants in home gym exercise in the United States fell slightly from 26.69 million in 2006 down to 25.51 million in 2013."
    Quotes
    • "The majority of personal trainers who work for the government work in recreation centers or parks and recreation departments."
    • "Although they typically work with only one or two clients at a time, many personal trainers working in government establishments also hold group classes with a narrow focus, such as cycling, aerobics, yoga or Zumba."
    Quotes
    • "The American survey from user insights platform Alpha, which examined how ready US consumers are to train at home rather than in the gym, found 7% of those questioned currently subscribe to an in-home fitness class like Peloton, while 54% are interested in buying an at-home fitness system."
    Quotes
    • "Client sessions can take place in your own fitness space or clients' homes. "
    Quotes
    • "Whether it’s Mirror, a Peloton stationary bike with a tablet screen, or Tonal’s new “smart” weight-training system, these new products bring convenience to working out. Place one of these machines between the bed and the coffee maker, and you really have no excuse not to exercise."
    Quotes
    • "According to data from the IDC, sales of various wearable fitness devices are up over 163 percent compared to previous years. That means the number of consumers accessing wearable devices is on the rise as well. As a result, tracking home fitness progress is becoming easier than ever before."
    • "For consumers, the key will be to remain discerning of new products and participate in conversations with other trainees to compare results and emerging methodologies. And, while the gym may not be going away anytime soon, the traditional structure may have to provide more services to keep its customer share away from new online solutions."
    • "There is a growing movement in fitness and training to ditch the gym and work out at home. Initial conclusions might point to cost as the main reason, but many people who opt for home workouts spend plenty of money on online programs, fitness experiences and relevant wellness information"
    From Part 12
    Quotes
    • "In the U.S., there are now 34,000 gyms, fitness centers, and health clubs – 6.4% more than only four years ago in 2013. That also means that there are twice as many gyms in the U.S. as McDonald’s fast food chains!"
    • "In 2017, more than 54 million Americans had paid gym memberships. (Which means that about 200 million adult Americans don’t go to a gym, although that doesn’t mean they don’t work out, of course.)"
    • "For the second year in a row, they collectively went to the gym to work out more than 5 billion times! In fact, the average gym member went to work out there more than 100 times last year – which was an all-time high."
    • "The average cost of a gym membership in the U.S. is $41 per month,"
    Quotes
    • "To cater to the budget-conscious, gyms cut prices — the average membership dropped from $49 a month in 2009 to $41 a month in 2014, according to industry research firm IBISWorld"
    Quotes
    • "In fact, average dues have risen 17% in the past two years alone. And back in 2011, the average price was only $43"
    Quotes
    • "Nearly one-third of Americans set a weight-related resolution in 2016, but only 44 percent of people maintained their resolutions for six months."
    • "By targeting casual exercisers with nice facilities, well-designed lounges, juice bars, and free bagel days, gyms make money without overcrowding their workout space or putting too much wear and tear on equipment."
    Quotes
    • "Over the past five years, the Gym, Health & Fitness Clubs in the US industry has grown to reach revenue of $36bn in 2019."
    Quotes
    • "Monthly fees average $35 to $40 for a single membership, but can be as low as $20 depending on age, location and whether customers are willing to sign an extended contract. Many health clubs also charge an average enrollment fee of $40, but some can charge more than $100."
    Quotes
    • "Across the US, 17 million people—roughly 7% of the population—spent $6 billion (inflation-adjusted) annually as members of the country’s 10,000 gym locations"
    • "By 2016 health club locations and memberships more than tripled to 36,000 and 57 million, respectively, and total revenue increased 450% to $27 billion. For reference, the US population and GDP grew 36% and about 300% (in constant dollars) over this time period."
    Quotes
    • "The gyms, health & fitness clubs market refers to clubs that provide exercise facilities such as weight and exercise machines, fitness classes, personal training and other services such as health and beauty facilities, food and drink, clothing and equipment, designed for users to improve and maintain their physical health"
    • "The performance of the market is forecast to accelerate, with an anticipated CAGR of 3% for the five-year period 2018 - 2023, which is expected to drive the market to a value of $25,174.6m Or 25.1 Billion by the end of 2023"
    Quotes
    • "More than 71.5 million consumers utilized U.S. health clubs in 2018, a record high since IHRSA began tracking health club utilization in 1987. The number of individual members totaled 62.5 million, up 2.6% from 60.9 million in 2017."
    • "At 39,570, the number of health club facilities increased by 2.8% over the previous year, up from 38,477 locations in 2017. In 2018, U.S. health club industry revenue increased to $32.3 billion, up from $30 billion in 2017, a 7.8% growth."
    • "Since 2008, membership has grown by 37.1%, while the total number of club-goers has increased by 34%. The total number of health club visits has also increased, amounting to 6.1 billion visits in 2018, up from 4.3 billion in 2008."
    Quotes
    • "Consumers flocked to health clubs and gyms last year, with over 6 billion individual visits to nearly 40,000 fitness facility. This resulted in a revenue increase to $32.3 billion, up from $30 billion in 2017, a 7.8% growth."
    • "Consumers in the U.S. continue to place a high value on their health, investing in club access and services in order to meet their health and wellness needs as well as fitness and athletic goals"
    • "More than 71 million consumers utilized U.S. health clubs in 2018, a record high since IHRSA began tracking health club utilization in 1987. The number of individual members totaled 62.4 million, up 2.6% from 60.9 million in 2017."
    Quotes
    • "All five top gym spending cities in the country are somewhere in the Eastern part of the United States. Only about 15% of the population has a gym membership in the U.S. So how many gym memberships are there in the U.S.? Roughly 60 million"